German chancellor asks coal commission to postpone final report

This analysis has originally been published in an extended version for ICIS EU carbon subscribers on 22 Nov 2018 at 12:32 CET.

Main points

• According to media reports, the German government will likely extend the timeframe for the coal commission to deliver its final report until January 2019, compared to the previous deadline end of this year
  • During her speech in Parliament on 21 November, Merkel stated that “it is not about making decisions on phase-out dates first, but about […] preparing people for structural change”
  • The decision was taken after three German prime ministers from key lignite regions Brandenburg, Saxony and Saxony-Anhalt expressed their “concerns” about the commission´s approach regarding structural changes in the affected regions
• Another reason for the potential delay could be worries about financial burdens to Germany’s budget expressed by finance minister Scholz
  • In its latest leaked draft, the commission proposes a cancellation of EUAs accounting for the emissions of closed coal capacities, resulting in reduced auction revenues
• The coal commission did not release an official statement confirming these developments

Analysis

German coal phase out timeline unlikely to be ready by COP24

• After its meeting last week, the coal commission released a statement expressing their aim to deliver a final report by 28 November
• The latest leaked draft suggested that the commission has made progress on important subjects, but is yet lacking a final consensus on the coal phase-out timeline
• The postponement of the final report would mean that Germany would not be able to present a phase-out timeline at the COP24 negotiations in December, which was the goal expressed by energy minister Altmaier in September

The federal government likely “extends” the coal commission deadline

• The German coal commission was originally given a mandate by the federal government to provide a report on a coal phase out strategy with the aim to deliver it by the end of 2018
• Merkel´s comment provides flexibility to the commission to delay that report by early next year and go back to topics already agreed upon like structural changes

Merkel’s move put into political context

• In light of recent turmoil concerning Merkel’s position within the government following her announcement to step down as CDU party leader in December and the stability of the Grand Coalition, the chancellor’s announcement could potentially affect the implementation of any given proposal by the commission
• In case the current Grand coalition government would be challenged by snap elections, the coal commission’s mandate would have to be renewed by any new incoming government

Sebastian Rilling is Student Analyst – EU Power & Carbon Analytics. He can be reached at Sebastian.Rilling@icis.com

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